Вы находитесь на странице: 1из 6

COMSATS Institute of Information Technology Lahore


Synopsis for the degree of: M.S

PART-1(to be completed by the student)

Name of Student Khalil ur Rahman
Department Management Sciences
Registration No. FA12-MSMS-008
Name of (i) Research Supervisor Dr. Waheed Akthar
Members of Departmental Advisory Committee
Major Field of Study Management Sciences
Field of Specialization Finance
Socio-Economic Factors Affecting Customer Satisfaction: A
Title of Research Proposal Comparative Study Between Family Takaful and Life
Insurance Services in Pakistan

The aim of this study is a comparative study between Takaful (Islamic insurance) and conventional
insurance services. For a long time, the idea of insurance has been misunderstood and misinterpreted
among religious scholars and Islamic jurists. Static religious beliefs and misconceptions about validity of
insurance kept Islamic scholars far away from being innovative and to come up with an alternative to
conventional insurance. There have been conflicting views of Ulama regarding validity of insurance. For
the past two decades, Takaful has emerged as an Islamic alternative to conventional insurance and a
powerful tool to manage individual risks and business downturns. Takaful has proved its validity to
combat individual as well as business risks and to boost up the economic activities of a country. The
study aims to judge public perceptions and their level of satisfaction about conventional insurance as well
as about Takaful hence providing a framework for Takaful industry to promote Takaful. This study will
also determine the Socio-economic variables that significantly affect the demand of family Takaful
schemes in Malaysia The present study is based on opinions of general pubic including customers of
conventional insurance companies as well as Takaful; External and Internal (Managers and Employees)
customersof Takaful companies. In this study cross sectional research design will be used. For this
purpose, a sample size of 500 respondents was selected comprising of these stakeholders related to
Takaful and Conventional insurance. We will go for descriptive statistics and inferential statistics and
will use SPSS and Amos for fitness of data.


Takaful and Insurance are the same in order to achieve the goal and that is to manage the risk. Risk is the
essential part of life and could not be avoided except to transfer or share it. Not even a single business or
individual is running without risk. But there are two major ways to avoid or mitigate the riskes that are
Takaful (to share the risk) which is Shariah compliant and Insurance (to transfer the risk) which is not
Shariah compliant.

[one page is enough]

Preliminary Literature Review

Takaful is the Islamic substitute to the conventional insurance which is based on social cooperation,
mutual help and joint indemnification of losses to the members. It is a contract to collectively indemnify
the losses occurred by donating money with the mutual consent. (Maysami,Golriz and hedayati,1997).
The main purpose of takaful under is to bring equity participation to all parties involved with an objective
to help in bad times to the parties (policy holders) involved in contract. Profit earnings is not the main
goal, while sharing any profits generated incidentally is acceptable (Maysami and Kwon, 1999).
[2-3 pages are enough]

Objective of the study

This research aims to achieve the following objectives:

1. To study the operational mechanism of Takaful and Conventional Insurance.

2. To judge the opinions of the Scholars belonging to different schools of thoughts about Takaful
and Conventional Insurance.

3. To judge the perceptions of customers of Takaful and Conventional insurance and their level of
satisfaction with the Takaful or conventional insurance.

4. To draw important policy recommendations for Takaful Industry and policy makers.

Significance of the study

As the insurance is one of the financial sectors which are growing these days as evidenced by the
growing rates 11% in emerging economies as well as developing countries while the growth rate in
developed countries is up to 4% and takaful is on the other hand has expected growth rate of up to 15%.
Insurance and takaful are not only integral tool for the risk management but also insurance funds
(premiums) and takaful contributions are further invested into different sectors in an economy will also
will lead to stability and growth in economy. So it is important to look what are factors affect the demand
of the takaful and insurance.
Given the misconceptions related to conventional insurance and emergence of Takaful as an alternative
to conventional insurance, the present study also aims to judge public perceptions that are of prime
importance to Takaful industry to promote Takaful and provide a level playing field for new Takaful
players who are interested to enter into Takaful business. This study will help to eliminate
misconceptions that exist among general public about insurance. So we will also focus is on the factors
affecting customer satisfaction of both conventional and takaful. This study will also assist SECP
(regulatory authority of Pakistan) in devising sound policies for Takaful industry and setting standards
that will not only enhance the functioning of Takaful operators but also safeguard the interests of all
stakeholders. Finally, it might contribute towards restoring the confidence of local and foreign investors.

Statement of the Problem

[to the point only one paragraph is enough]
Research Questions
The main problem statement can be redefined into following three sub-questions;
1: What is the impact of Socio-economic variables on the customer satisfaction and demand of the
takaful and insurance in Pakistan?
2: what is the impact of availability and access as well as innovation in insurance and takaful on
customer Satisfaction?

For Conventional Insurance:
Customer satisfaction is significantly affected by socio economic factors of the general public.
Customer satisfaction is dependent on the availability of insurance services to the general public.
Customer satisfaction is significantly affected by general public access to insurance services.
For Takaful (Islamic insurance):
Customer satisfaction is significantly affected by socio economic factors of the general public.
Customer satisfaction is dependent on the availability of insurance services to the general public.
Customer satisfaction is significantly affected by general public access to insurance services.

We will collect data from Lahore, Rawalpindi/Islamabad, Peshawar and Karachi. The focus on these
cities will be for two reasons: First, both Conventional insurance and Takaful companies have their major
offices in these cities. Secondly, these cities contain most of the target population including customers of
Conventional insurance and Takaful.

External and Internal (Managers and Employees) customers of Takaful and Insurance companies.

Selection of Sample
Sample for this research project will be consisted of External and Internal (Managers and Employees)
customers of Takaful companies, Customers of Takaful and Insurance companies and will be selected in
the following way:

Internal (Managers and Employees) customers of Takaful and Insurance companies

There are five Takaful companies in Pakistan: two in family Takaful and three in general Takaful. 20
persons from each Takaful company (including managers and employees) will be selected.

Takaful Customers
Through the conversation with the senior managers of Takaful companies, it was revealed that mostly
general Takaful consisted of corporate customers whereas family Takaful consists of individual
customers. So it was decided to focus on two family Takaful companies. 100 customers from each family
Takaful company will be selected.

Conventional Insurance customers

As conventional insurance is the dominant industry in Pakistan. State Life Insurance Company (SLIC)
and National Insurance Company Limited (NICL) have the largest market share in the country. So 100
Insurance customers from each company will be selected.

Expected sample size:

External and Internal (Managers and Employees) customersof Takaful companies 100
Customers of Takaful companies 200
Customers of Conventional insurance companies 200
Total 500

Analysis of Data:
Data will be analyzed through SPSS software. Descriptive statistics and inferential statistics will be used
to draw some meaningful results from the data. Effort will also be made to develop some model
indicating relationship among different variables of the study. AMOS will be used to test the fitness of

Theoretical framework:

Proposed Theoretical Model for Conventional Insurance: [not necessary but good impact]

Independent Variable

Independent Variable
Independent Variable

Independent Variable

These models will be tested using methods of moderator regression devised and used by Baron and
Kenny (1986) and Holmbeck, G., (1997) as well as MacKinnon et al. (2002).

Limitations Of The Study:

The study has certain limitations;
There were lack of resources and time constraint as well.
Some data is missing due to non-provision.
[Optional ]

Tentative Time Table
No. Research Action Duration
1. Review of literature 3-4 weeks
2. Data collection 2-3 weeks
3. Data analysis 3-4 weeks
4. Report writing 2-3 weeks

Abdel Karim, R.A. and Archer, S. (2002). “Islamic Finance: Innovation and Growth”,
Euromoney Books, Dubai.
Abdul Aziz, F. and Lian, T. (2006). “NTUC income’s experiencing in developing Takaful
insurance”, NTUC Income, Singapore.
Abdul Wahab, A. R., (2006). “Takaful Business Models, Opportunities, Obstacles and
Practical Recommendations for Islamisation of Insurance System in Pakistan”, Sidat Hyder Morshed
Associates (Pvt) Ltd., Karachi, Pakistan.
Bhatty, A. M. (2001). “Takaful industry: Global profile and trends”, New Horizon,
No.108, institute of Islamic banking and insurance, London.
Barron R. M. and Kenny, D. A. (1986). “A Moderator Mediator variable distinction in social
psychological research: Conceptual, Strategic and Statistical considerations”. Journal of
Personality and Social Psychology, Vol. 51, No. 6, 1173-1182
Bashir, M. and Mail, H. H. (2011) “Consumer Perceptions of Islamic Insurance Companies in Brunei
Darussalam”. International Journal of Emerging Scinces, 2011 Vol: 1 Issue: 3, pp 285-306
Billah, M. M. (2003). “Islamic and modern Insurance (Principles and Practices)”,
Ilmiah Publishers, Kuala Lumpur, Malaysia.
Holmbeck, G., (1997). Toward terminological, conceptual, and statistical clarity in the study of
mediators and moderators: Examples from the child-clinical and pediatric psychology
literatures. Journal of Consulting and Clinical Psychology, 65(4), 599-610.
IAIS, (2006). “Analysis of self-assessment exercise 2004-2005”, Report on Insurance
Core Principles, International Association of Insurance Supervisors, Switzerland.
IAP (2006), Insurance Association of Pakistan. Website: www.iap.com.pk
IFSB & IAIS, (2006). “Issues in Regulation and Supervision of Takaful (Islamic
Insurance)”, issue paper, Joint Working Group: Islamic Financial Services Board and International
Association of Insurance Supervisors, Malaysia.
MacKinnon, D., Lockwood, C., Hoffman, J. (2002). A comparison of methods to test mediation and
other intervening variable effects. Psychological Methods, 7(1), 83-104.
Masud, H (2011) “Takaful: An Innovative Approach to Insurance and Islamic Finance”.
University of Pennsylvania, Journal of International Law, 2011, Vol: 32, Issue 04, pp.
Mehmood, A. (2002). “Islamisation of Economy in Pakistan: Past, Present and Future”,
Journal of Islamic Studies, Islamic Research Institute (IRI), Islamabad. 41(4), p.686
Muslim population world wide, (2007). As available on www.islamicpopulation.com

Obaidullah, M. (2002). “Islamic Risk Management: Towards greater ethics and

efficiency”, International Journal of Islamic Financial Services, Volume 3, Number 4, pp. 2-4 as retrieved
from www.islamic-finanace.net on Monday, 05th February, 2007.
Obaidullah, M. (2005). “Islamic financial services”, Islamic Economic Research
Centre, King Abdul Aziz University, Jeddah, Saudi Arabia.
OECD, (2004). “OECD Principles of Corporate Governance 2004”, Organization for
Economic Co-operation and Development, OECD publications service, Paris.
Patel, S. (2004). “Takaful and Poverty Alleviation”, International Cooperative and
Mutual Insurance Corporation (ICMIF), London as retrieved from www.icmif.org/Takaful on Tuesday,
18th September, 2006.
Salleh, F. B and Kamaruddin, A. R (2011) “The Effects of Personality Factors on Sales Performance of
Takaful (Islamic Insurance) Agents in Malaysia”. International Journal of Business and Social
Science, Vol: 2 Issue: 5; pp 259-265
Swartz, N. P and Coetzer, P (2010) “Takaful: An Islamic Insurance Instrument”. Journal of
Development and Agricultural Economics Vol. 2, Issue: 10, pp. 333-339. ISSN 2006- 9774
SBP Reports, (2003 - 05). “Pakistan Financial Sector Assessment”, Research Department,
State Bank of Pakistan, Karachi.
SECP (2007), “Insurance Industry News”, Securities and Exchange Commission of
Pakistan, Karachi. Also available at www.secp.gov.pk
Sigma (2006). “World insurance in 2005: moderate premium growth, attractive
Profitability”, Swiss Reinsurance Company, Economic Research and Consulting, Switzerland.
Sigma (2007). “World insurance in 2006: Premiums came back to ‘life’, Swiss
Reinsurance Company, Economic Research and Consulting, Switzerland.
Takaful and Re-Takaful companies, (2006). as retrieved from
https://www.reorient.co.uk/pdfs/Takaful_Re-Takaful _companies.pdf on Saturday, 4th November, 2006
UNDP (2006). “Human Development Report 2006”, United Nations Development
Programme, Palgrave Macmillan, New York, USA.
World Bank (2006). “World Development Report 2006: Equity and Development”,
World Bank and Oxford University Press, USA.
World Fact book, (2006). “The world fact book 2006”, Central Intelligence Agency, USA.